In
Washington, D.C., the U.S. Congress is giving consideration to a series of
revisions to the federal tax code, and among them are two provisions which would
impact the housing industry and property owners. The proposals, which would
place additional tax burdens on owners and investors of residential and
commercial real estate, are the focus of a member-wide
Legislative
Call-for-Action issued earlier this week which you are urged to participate in
via the REALTOR® Action Center.

The most
onerous proposal is one that would require all owners of rental property to
provide an IRS Form 1099 to all contractors with whom they do business and pay
$600 or more in a calendar year for services rendered. This requirement would
apply even to the smallest landlord who owns a single property and hires a
plumber or electrician to perform repairs or renovation work, and require filing
1099 forms whenever applicable. The National Association of REALTORS® argues
that this proposed code change would impose new expenses on property owners,
particularly small landlords who don’t use tax professionals, and would subject
them to penalties they are ill-equipped to pay.

Additionally, Congress is considering taxing “carried interest” at ordinary
income rates, instead of the current rate of 15 percent. If this amendment to
the tax code is changed, it would mark the first time a particular type of real
estate investment gain would no longer qualify for capital gains treatment. NAR
opposes this proposal on the basis that real estate is a fixed asset typically
held for a long period of time, and therefore fundamentally different from hedge
funds and financial instrument investments. The revision would set a terrible
precedent and is ill-advised given the fact that the residential, multi-family
and commercial markets are still fragile, NAR officials maintain.

Boston area single-family home and condo sales climb for eighth
consecutive month

The
recovery underway in the local residential real estate market continued in
April, according to the last monthly data compiled from MLS-PIN. In greater
Boston, sales of detached single-family homes and condominiums each rose for an
eighth consecutive month in April compared to the same month last year, while
median selling prices for homes and condos increased 14 percent and 8 percent
respectively during the past 12 months.

A total of 799 detached
single-family homes were sold last month, which represents a 45 percent increase
over the April 2009 sales level, and is the sixth best sales total on record for
the month of April in the 54 communities that comprise the GBAR jurisdictional
area. Condo sales increased an even more robust 50 percent over the past
12 months to 794 units sold in April 2010, making it the fifth strongest April
sales total ever recorded in greater Boston.

In the detached single-family
home market, the median selling price has now increased six of the past eight
months dating back to September 2009, an indication that prices in most
communities have stabilized and that trade-up buyers have been returning to the
market in increasing numbers this spring. Still, April’s median selling price
of $440,200 for detached single-family homes remains 18.3 percent below the peak
monthly median price of $539,000 recorded in August 2005, and this improved
affordability along with continued near record low mortgage rates should keep
demand strong through the summer months.

Similarly,
the median selling price for condos has risen for five consecutive months on an
annual basis in greater Boston, following an extended period in which the median
price fell during 16 of 17 months prior to December 2009. The condo median
price remains 9.9 percent below its peak of $372,000 set in July 2007.

While the federal home buyer tax credit expired for most
buyers who lacked a signed contract as of April 30, a provision in the
legislation keeps the credit in effect an additional year for military personnel
as well as intelligence and foreign service employees deployed overseas for 90
days or more between January 1, 2009 and April 30, 2010. Individuals who meet
the specific service criteria can still claim the tax credit if they sign a
binding contract to purchase a home on or before April 30, 2011 and close on or
before June 30 of next year. The extended benefit could be helpful to members
of the armed services ending tours of duty in Iraq and Afghanistan, and sailors
returning from naval deployments around the world.

Notably, members of the military also receive a waiver on the
time of occupancy requirement of the home purchased with the tax credit. While
most home buyers purchasing a home with the tax credit must use that home as a
principal residence for a period of no fewer than three years to avoid
forfeiting the credit, military, intelligence and foreign service personnel do
not have to repay the credit if they have to sell the home after fewer than
three years occupancy due to official business.

Effective April 30,
Fannie Mae has tightened its underwriting requirements for certain types
of mortgages. To help limit payment shock for those with an adjustable rate
mortgage that adjusts during the first five years of the loan, borrowers
must be qualified at the higher of the note rate plus 2 percent, or the
fully indexed rate. In addition, interest-only mortgages are being
restricted so they remain as a financial management tool, but are not
available to make a loan affordable. As a result, interest-only mortgages
may no longer be used for cash-out refinances, Flexible mortgages,
MyCommunityMortgage® loans, investment properties, or two- to four-unit
properties. The minimum credit score for interest-only mortgages is now
720, and the borrower must have reserves covering at least two years.
Finally, seven-year balloon mortgages are no longer available as a standard
Fannie Mae product.

Notably, last month Fannie Mae also announced new rules regarding the
eligibility of a borrower to obtain a new mortgage after a pre-foreclosure
event – defined as a short sale or deed-in-lieu of foreclosure. The new
rules, issued on April 14, change the waiting period for these borrowers,
and add variations depending on the loan-to-value ratio (LTV) and whether
there are extenuating circumstances. For a consumer with a prior short sale
or deed-in-lieu of foreclosure without an extenuating circumstance, the new
waiting periods are 2 years with an 80 percent maximum LTV, 4 years with a
90 percent LTV, and seven years otherwise. If there are extenuating
circumstances, the new waiting period is two years with a 90 percent maximum
LTV ratio. Fannie Mae has also tightened the requirements for
re-establishing credit, so that in addition to the lengthier waiting
periods, the loan must meet delegated underwriting and minimum credit score
requirements, and the borrower must have traditional credit

Do you
know a deserving colleague or affiliate member whose professionalism and
volunteer service to the REALTOR® association and the local community or
charitable causes sets them apart from others? If so, why not nominate him
or her for one of this year’s GBAR member recognition awards?
This year, the association is seeking nominations
for five different awards, including the inaugural REALTOR® Spirit Award and GBAR Affiliate Member of the Year. The annual member recognition awards
also include the Greater Boston REALTOR® of the Year, GBAR Good Neighbor,
and Andrew F. Hickey Distinguished Service awards.

Members may be
nominated for one or more of the above awards. The entry deadline for
nominations is June 30, 2010. For more information, including the purpose
and criteria for each award, as well as nomination forms, go online to
gbar.org for the
GBAR Awards Nomination packet.

REALTORS® from
across the Bay State will be gathering at the Massachusetts State House on
Tuesday, June 8 for the 25th Annual REALTOR® Day on Beacon Hill.
This is an opportunity to speak directly with state legislators on issues
affecting your business, the rights of property owners, and the housing industry
in Massachusetts. Plus, there is literally no cost to attend.

The program,
which begins at 10 a.m., will include an issues update on the REALTOR®
organization’s 2010
legislative priorities, as well as a keynote address by Massachusetts Senate
President Therese Murray (D-Plymouth). In addition, there will be a
complimentary networking lunch at the GBAR/GBREB offices with local legislators
to discuss bills of primary interest to the real estate industry, as well as an
appearance by current Senate Minority Leader and REALTOR® Richard Tisei
(R-Wakefield).

Attendance at
REALTOR® Day on Beacon Hill is free, and this year you can avoid the expense and
hassle of driving and parking in Boston by taking advantage of free bus
transportation being provided by GBAR for this event. There are four
suburban locations to park and board a bus – Dedham, Framingham, Sharon and
Waltham – with seating available on a first-come, first-serve basis.
Registration and bus reservations are strongly encouraged by May 25, as seating
is limited and invitations to legislators for the networking lunch will be based
on members/constituents signed up to attend a minimum of two weeks prior to the
program.

For more information or to register for
REALTOR® Day on the Hill, download our
promotional flyer or go
online to gbar.org.

Applications are
now being accepted from those interested in serving in elected leadership
positions with GBAR in 2011. If you or a colleague you know would like to take
a more active role in setting the programming, policies, and strategic direction
for the association, you are invited to submit a candidate application
nominating yourself or a qualified fellow REALTOR®. The deadline to apply for
elected office (president-elect, vice president, treasurer), or open seat as a
local, state or national director is August 1st, while application
for the position of Greater Boston Region Vice President to the Massachusetts
Association of REALTORS® (MAR) is May 31, 2010. For position descriptions,
including information on the qualifications and responsibilities of each open
position, as well as the candidate application form the
Officer & Director Nomination Packet is available for download from gbar.org.

Notably, members
interested in becoming association leaders and more effective decision-makers
and managers in business, also are encouraged to consider enrolling in the MAR
Leadership Academy. The Leadership Academy is a training program that allows
participants to develop strong leadership and life skills, including
goal-setting, networking and communication skills, through individual study,
group sessions, and team-building exercises. The program includes four sessions
over a six-month period, and also requires participation on a MAR committee in
2011 and attendance at three MAR Board of Directors meetings from September 2010
– May 2011. Tuition is $750. The deadline to apply is June 30, 2010. To learn
more and obtain an application, Academy
materials are available for download from the
Association Leadership
page at marealtor.com.

The Massachusetts
Coalition for the Homeless, the designated charity of the Greater Boston
Association of REALTORS®, has been awarded a $1,500 grant from the Massachusetts
Association of REALTORS® (MAR) Charitable Foundation. MAR’s Housing & Homeless
Assistance Grants support non-profit organization’s that provide affordable
housing, transitional shelter, and other emergency care services to residents of
the Bay State.

This marks the
third time in three years that the Massachusetts Coalition for the Homeless has
been nominated by GBAR and subsequently chosen to receive a Housing & Homeless
Assistance grant from the MAR Charitable Foundation, with a total of $6,000
awarded in that time. Since 2008, an additional $30,000 in monetary grants has
been contributed by GBAR to the Massachusetts Coalition for the Homeless through
the GBREB Foundation.